Overview of the Arvind Mills Pvt. Ltd.

General Overview of the Arvind Mills Pvt. Ltd.

The Textile Industry
The textile industry forms a very important part of the Indian economy. It was one of the earliest industries to come into existence. Textile production forms nearly 14% of the total industrial production and accounts for a 30% of the total exports and is the second largest employment generator after agriculture.
Talking about the competition being faced by Arvind Mills there are a total of 92 firms including Arvind Mills in this sector of textile manufacturing. Other major players in this sector are Cotton Corporation, Raymonds, Bombay Rayon etc.
The sector receives a total sale of 5717.73cr per year. The latest of this quarter shows a total sale of 960.97cr.

About the company
Arvind Mills ltd is a flagship enterprise of Lalbhai group and was incorporated in 1931 to manufacture cotton textile. It has been one of the leading players in manufacturing cotton products. The products included conventional suiting and shirting fabric till it moved to denim production in 1980. Currently Arvind Mills is the largest producer of denim fabric in the world.

The promoters
The chairperson and the promoter of the company is Mr. Arvind N. Lalbhai. He has been associated with the Company for over 60 years. He has been the Director since March 1974 and Managing Director since January 1975 till November 2002. The other permanent directors of the company are Mr. Sanjay S. Lalbhai(Managing Director) and Mr. Jayesh K. Shah(Director Finance). There are a total of 45 promoters of the company.
Total number of shares held by the promoters of the company is 71591251. They amount to a total of 34.19% of the total equity. The distribution of shares amongst the promoters was not available. Only info available was that 71319955(34.06%) shares are held by corporate bodies and only 271296(0.13%) shares are held by the individuals or the Hindu Undivided Family.

Products
Arvind Mills has registered its presence in the market with an array of local and international brands of readymade garments. It is one of the leading players in this sector of ready to wear clothing. The company in India has the right to market many international brands. Apart from that it also owns many popular Indian brands.

The list of the products sold by Arvind Mills Ltd in India is as follows –

International brands –
-Arrow
-Lee
-Flying machine
-Wrangler
-Nautica
-Jansport
-Kipling

Local brands –

-New port
-Ruggers
-Excalibre
-Ruf n tuf

Market share
The total sale which this sector gets is 5717.73cr. Out of the total yearly sales Arvind Mills has a sale of 68.35cr. The percentage market shared by the company is 1.19%.

Collaborations
Arvind Mills Ltd has a collaboration with West Point Stevens Inc. West Point Stevens is a U.S. based textile manufacturing company. The collaboration between this company and Arvind Mills is for the manufacture of Knitted fabric.

Recent news
Arvind Brands, the wholly-owned subsidiary of Arvind Mills has agreed to form a joint venture with VF Corporation of US for marketing the various brands owned by VF Corporation in India. In this joint venture coming into effect from September 01, 2006, Arvind Mills will hold 40% equity and VF Corporation will pay $ 33 million for the balance 60% equity in the new company. The new company formed will be called VF Arvind Brands. The existing business includes licenses from VF for Lee, Wrangler, Nautica, Jansport and Kipling brands. These brands currently held by Arvind Fashions will be transferred to this new company VF Arvind Brands.
The new company will be handling the designing, sourcing and marketing of the existing licensed brands and in the future may add a few more brands belonging to VF Corporation. The retailing and the stores infrastructure will continue to be held by Arvind. Darshan Mehta, currently President, Arvind Brands, will be CEO of the new company.

Details of listings
Arvind Mills is listed in the following stock exchanges –
-Ahmedabad
-Kolkata
-Luxemburg
-Bombay Stock Exchange
-National Stock Exchange

The BSE code for the company is 500101 and its BSE group is ‘A’. The NSE code for Arvind Mills is ‘ARVINDMILL’.

-fahad jameel

Analysis of the Nobel Prize winning macro-economic theory by Edmund S. Phelps

Analysis of the Nobel Prize winning macro-economic theory by Edmund S. Phelps.


The work of Phelps basically deals with unemployment in the economy. He tried to answer some of the basic macro-economic questions that were left unanswered by the classical macro-economists as Keynes. He tried to answer why involuntary unemployment is observed even in the best of times and why a drop of aggregate “effective demand” causes a rise of unemployment.

His award winning theory is called the ‘Intertemporal tradeoffs in macro-economics’. These tradeoffs are between the unemployment and the inflation present in the economy. He directly points out on the irrelevance of the Phillips curve which showed the relation between inflation and unemployment. The thoughts of Phelps on this topic are discussed here within.

Phelps says that low unemployment and low inflation are central goals of any stabilization policy. During the 1950s and 1960s the view of a stable tradeoff between inflation and unemployment was established in the form of called Phillips curve. According to this, the price for reduced unemployment was a one-time increase of the inflation rate. He challenged this view through a more fundamental analysis of the determination of wages and prices, taking into account problems of information in the economy. Individual agents have incomplete knowledge about the actions of others and must base their decisions on expectations. He formulated the hypothesis of the expectations-augmented Phillips curve, according to which inflation depends on both unemployment and inflation expectations.

According to Phelps, unemployment does not only depend on inflation it also depends on the expectation of unemployment. He showed that how low inflation today leads to expectation of low inflation in the future. So using this concept he had put forth a new type of Phillip curve called the expectations augmented Phillip curve. He recognized that inflation does not only depend on unemployment, but also on the expectations of firms and employees about price and wage increases. Phelps put together a new model to describe the relationship between inflation and unemployment, known as the expectations-augmented Phillips curve.
As a consequence, the long-run rate of unemployment is not affected by inflation but only determined by the functioning of the labor market. It follows that stabilization policy can only dampen short-term fluctuations in unemployment. Phelps showed how the possibilities of stabilization policy in the future depend on today's policy decisions: low inflation today leads to expectations of low inflation also in the future, thereby facilitating future policy making.

-fahad jameel

ANSOFF Matrix analysis of Amul

Ansoff matrix

The Ansoff matrix developed by Igor Ansoff is a very essential tool for strategic planning. It helps the firm to identify the firms’ growth using the intensification and diversification strategy, which aims at achieving growth through certain modifications in the firm’s existing business. According to Ansoff model four different strategies are possible. They are –

• Market penetration strategy
• Market development strategy
• Product development strategy
• Diversification

Market Penetration Strategy

This strategy involves achieving growth through existing products in existing market. Amul’s market penetration strategy involves its expanding its customer base in the existing market. Currently Amul is trying to expand its customer base through the following measures –

• Amul is set to build up 10,000 `Amul Parlours' across the country during the year. These stores will sell the entire product range of Amul products, in addition to the existing retail network for ice cream, milk and other products.
• It is trying to get more and more customers through a more intensive distribution. It is opening more stores at Highways, Railway stations, Airports, Bus stations, Schools, Colleges, and Industrial Canteens etc.
• It is trying to find place in various retail outlets, the latest story being Amul trying to acquire a shelf in the yet to come Wal-Mart.
• Opening small Amul-exclusive stores in each and every neighborhood to reach to the very near of the consumer.

Market Development Strategy

This strategy is concerned with creating business through developing new markets with existing products in hand. Amul is using this strategy to capture new and unexplored sectors without creating new products. What Amul is doing in this sense is as follows –
• Amul is now shifting its focus from urban to rural markets and smaller towns. In 2005 Amul added 900 new stores all across small towns to increase its reach.
• Amul is capturing the market of diabetic and health conscious people through sugar free ice-cream, which is a variation of an existing product.
• Amul will expand its fresh milk markets to Kanpur and Lucknow and other smaller towns this year, thereby increasing its market base for the existing products.

• Amul is also increasing its market base for milk through a new version – the Amul Tazaa. Tazaa is the long-life version of milk which has a longer shelf life as compared to normal fresh milk. This product is highly picking up in the domestic and export market.

Product Development Strategy

Product development deals with producing new products for the existing customer base. Amul has vastly capitalized on this strategy by constantly coming up with newer products. Let’s have a look at some of them –
• Amul-Cool (milk based cool drink) and Amul-Kool café – these are the products aimed at the youth of the country with synonymous marketing campaigns.
• It is coming up with a chain of pizza corners. This chain would consist of around 2000 stores all over India.
• Stamina – the instant energy whey based sport drink has been launched to provide its customers with a totally new product.
• Amul has recently launched a new variation of ice-cream, the sundae swirl to its existing base of ice-cream customers.
• Amul-Masti, the packaged buttermilk is aimed to be another non-carbonated cool drink in the Amul Cool range which is not only aimed at the youth but also at the more mature chunk of the society.

Diversification Strategy

Diversification is a very important part for any business organization. For the further growth opportunities of a company diversification is required. When a new product is launched into the new market diversification holds good and provides more growth opportunities in the future. Diversification is a high-risk strategy as it involves taking a step into a territory where the parameters are unknown to the company. Amul has identified the need to increase its presence in newer markets and thus have come up with many new such strategies for increasing its presence in the entire market.

There are different types of diversification process that any company can adopt they are as follows:

• Concentric Diversification Strategy
• Conglomerate Diversification Strategy
• Horizontal Diversification Strategy

Concentric Diversification Strategy: It is the development of new products by using the older technology directed for the benefits of newer segments. In this type of diversification Amul has identified a segment for the health conscious people and is introducing two pro-biotic ice cream ranges, Amul Sugarfree and Amul Profile and both of these products will be available in five different flavors this is apart from the various regular ice cream products that it offers. They have identified the working class women as a new segment and has introduced frozen easy to cook stuffed parathas, matar paneer and paneer pakoras which makes them easy to cook quality tasty food in less time.

Conglomerate Diversification Strategy: It is developing new products for the newer markets. Amul in this concern has come up with an idea of introducing an altogether new spots drink named "Stamina" which will be the first sports drink by an Indian company and it will be priced at only Rs 12 for 200ml which will be lower than its competitors whose price ranges around 60 to 75 Rs. In this they have also introduced the Amul Pizza in order to enter the pizza market. They have also come up with flavored milk and also flavored lassis to enter newer markets.

Horizontal Diversification Strategy: It is developing newer products with newer technologies for the old customers. In this concern Amul to provide something new to its older and loyal customers have come up with a facility whereby they could order the food through the internet and this was at a time when internet was heard by very few in India during 1996.

Thus we can say that Amul has come across a long way in diversification to provide something new to its customers and in this concern what Amul has to say is that the diversification has nothing to do with the increasing competition.

-fahad jameel

May this MBA be of some use to you guys...!!!!

hey guys...

posting after quite some long time.....bt this time its some gud news.....maybe atleast fr some.

this is my second post.....jus becoz i never knew what to write.....so i decided to throw all the crap that i make my professors read onto the net......so i am goin to post all the assesments and analysations i do as a part of my cirriculum....

maybe of some help to those who are in the same field.....but can also be interesting stuff for others to read along.....so starting with the Ansoff analysis of Amul.....u can gt other stuff also continuing from the next post...

happy blogging

-fahad jameel